Ministry hopes for tax incentives in investments


THE Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) hopes the RM20 million income tax exemption proposed in Budget 2018 for investments made in venture capital (VC), VC funds or private equity (PE) can be gazetted by year-end.

MESTECC Minister Yeo Bee Yin (picture) said the ministry is currently working closely with the Finance Ministry (MoF) and the Securities Commission Malaysia (SC) to present the proposal to the Cabinet in two weeks time.

She said the proposal had been approved by the MoF and would be implemented by the SC once approved by the Cabinet. The VC, VC funds and PE are parked under the SC.

“With this being in black and white, corporates and private individuals who invest in these instruments will get tax incentives after three years, instead of upon exit of the investment,” she said in her keynote address at the South-East Asia Venture Capital and PE Conference 2019 yesterday.

She also said VC companies (funds) that can offer the incentive will need to be registered with the SC by Dec 31, 2019.

“The incentive will be claimable for investments made till 2023 with the incentive period starting at the first point of certification, which is by the SC,” she said.

Meanwhile, Yeo said as her ministry is going through a restructuring, it was also preparing Cabinet papers to be presented at the same time, on how to restructure and consolidate five agencies under it.

The agencies are Cradle Fund Sdn Bhd, Malaysia Debt Ventures Bhd, Malaysia Venture Capital Management Bhd, Malaysian Technology Development Corp and Kumpulan Modal Perdana Sdn Bhd.

“As there is some overlapping in functions and roles of these agencies, we want to make them more effective in catalysing growth,” said Yeo.